by Ryan Ong
There may be too many property listing sites for Singapore
WITH the addition of two new online services last year (Ohmyhome and Yotcha), the online property market has gotten crowded. Along with PropertyGuru, 99.co and StreetSine, all of them are now locked in a constant fight for your attention. And they all provide the same basic service, which is comparison.
All of this is supposed to be good for “the market”. Property agents, buyers and sellers are supposed to have it easier than ever. Listing sites are much cheaper than traditional marketing methods, such as classified ads – 99.co charges just $588 per year for 100 listings, while PropertyGuru (which is the granddaddy of property sites in Singapore) charges $2,240 per year.
Contrast this with traditional print advertisements, which can end up costing those same amounts for just a single ad. And of course, buyers now have the luxury of looking for property on their phone, on the bus or at home.
In some respects, these sites have succeeded in changing Singapore’s property market. Some of the changes that have been caused by these sites are:
- Buyers are quicker at spotting abnormal prices
- The property business is becoming more entwined with the online media business
- Buyers are somewhat better informed
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1. Buyers are quicker at spotting abnormal prices
Most property portals, such as 99.co or StreetSine, don’t just list the price of a specific property. They also show the prices of other properties in the same vicinity, which lets buyers work out the average (or median for the more mathematically inclined) price per square foot. For example, look at this screenshot:
You can see almost immediately if a unit is exceptionally expensive or cheap. Here’s another example, which also tracks prices in the general neighbourhood:
In the past, buyers had to dig through records themselves to check transaction histories. Portal listings practically guarantee every buyer is less likely to get ripped off, even first-timers who may not know where to check the price history. (You can check the Urban Redevelopment Authority’s records here by the way.)
The ease of information impacts our property market in ways that go beyond the portal’s user numbers. Even casually browsing the site could influence buyers and sellers.
2. The property business is becoming more entwined with the online media business
One major difference to the property market is that now, sellers have to fight for online visibility. Fewer buyers will walk around a neighbourhood for two hours, shopping for potential sales. They find their prospects via price and location filters on a portal site.
This leads to property agents and developers now having to think like media companies, instead of just real estate experts. If someone types “condo-jurong-under $800,000” into a search bar, every site wants to be the first result they get. As such, an increasing number of developers and agents are now also learning to think in terms of Search Engine Optimisation (SEO) and content marketing. In Singapore’s property market, “e-commerce” will soon lose its meaning – e-commerce is commerce.
At present, developers and agents are basically paying portal sites (or even private bloggers) to get them visibility. But it’s just a matter of time before they learn to produce their own online content.
Which leads to the third thing…
3. Buyers are somewhat better informed
Property news used to be esoteric. Go back to the 1980s; issues like stamp duties and deferred payment schemes were random words that made no sense to buyers. Today, most buyers – even those who are buying their first home – have some familiarity with concepts like the Qualifying Certificate or Additional Buyer’s Stamp Duty.
They can’t help it. Portal sites fight tooth and nail for high visibility online and that results in a non-stop deluge of content. Google one project and you’ll find a few hundred pages breaking down the pros and cons, and speculating on potential gains. And in order to get ahead, portal sites also churn out information on how loans work, what agents do, what the Option to Purchase is, and so forth.
That’s all a sneaky way to get visibility. When you type “what is an Option to Purchase”, every portal site wants to be the first to answer your question.
This results in buyers who are somewhat better informed. I say “somewhat better” because, within the mass of content, buyers are also absorbing information that persuades them to buy.
What hasn’t and probably won’t change no matter how many portal sites we get?
Portal sites are also credited with big industry changes, despite evidence to the contrary. They are:
- Decreased use of property agents
- Major changes in property prices
1. Decreased use of property agents
This is the number one accusation hurled at listing sites, like Yotcha. But that’s putting the cart before the horse.
In 2010, only 11 per cent of HDB resale buyers and sellers handled transactions without an agent. By 2013, that number was up to around 25 per cent. HDB itself has concise guidelines for buyers and sellers wanting to do this. You’ll note that Yotcha (and the app Ohmyhome, which bypasses the need for property agents) came about in 2016.
In other words, services like Yotcha came about as a response to fewer people using property agents. They are not a “cause” of it.
The commission of a property agent in Singapore is around 2 per cent of the sale price for sellers. On a $350,000 flat, that’s a hefty $7,000. So it’s not surprising that most people will at least try to muddle through it first and then call in an agent as a last resort.
Of course, this isn’t to say that Yotcha won’t compound the problem – it is too new to tell. But in the words of Billy Joel, it didn’t start the fire.
2. Major changes in property prices
So price comparison drives prices down, right? That’s a supposed benefit of comparison platforms, but we should be careful not to exaggerate the impact.
Property prices move for a huge variety of reasons. Property prices in Singapore are going down because of cooling measures by the G, a weakening economic outlook, fewer rich expats due to the slump in oil and gas and finance, and many other possible factors. One of those many factors may be the increased use of portals and price comparisons. But we can’t know that for sure or guess to what degree it contributes to falling prices.
The flip side is also true. If there’s a huge hype for a particular area, prices will be inflated. And the comparison platforms will reflect and reinforce that. When you can see everyone hiking prices, you will too.
It’s more accurate to say that various portal sites reflect the market sentiment. Property portals probably won’t be the catalyst for major price changes, no matter how many of them we have.
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